Startup Poland The Polish Tech Scene. 5 years. Warsaw 2019 © Copyright Startup Poland, Warsaw 2019 ISBN: 978-83-948788-7-0 THE POLISH Authors: Julia Krysztofiak-Szopa Monika Wisłowska TECH SCENE. Research methodology: 5 YEARS Agnieszka Skala Data science: Sotrender coordinated by: Jan Zając & Jakub Krawiec Proofreading: Aeddan Shaw DTP: wedesign.pl Publisher: Startup Poland, Al. Jerozolimskie 93, 02-001 Warsaw Free publication Available online at: www.startuppoland.org Report Partners: Data Science Partner: THE POLISH TECH SCENE. 5 YEARS Table of contents EXECUTIVE SUMMARY ....................................................... 6 STARTUP FOUNDERS ........................................................ 13 Top 10 conclusions from 2019 ................................................. 6 Startup density in Polish regions ....................................... 14 Legal forms of Polish startups ............................................. 15 INTRODUCTION ..................................................................... 8 Are founders opening up to registering 30 Years of a Free Market Economy: What makes companies abroad? .................................................................... 16 successful Polish startups successful? ............................. 8 Expert commentary: Agnieszka Skala .......................... 17 5 years of Startup Poland – Foreign founders and their revenues ............................. 18 achievements unlocked ........................................................... 10 Startups come with age ........................................................... 19 Women less likely to run a startup .................................. 20 Expert commentary: Eliza Kruczkowska ..................... 21 Education drives innovation ................................................ 22 Social sciences or engineering – what comes in handy? .......................................................................... 23 What did the founders do before their startup? .... 24 Expert commentary: Agata Kwaśniewska ................ 25 Serial entrepreneurship as an indicator of success? ........................................................................................ 26 Does having an expat experience pay off? ................ 27 VERTICALS & BUSINESS MODELS .............................. 29 Which verticals are hot and where? ............................... 30 Expert commentary: Michał Wojczyszyn .................... 31 SaaS, apps, or custom software? How the businesses are built .............................................. 32 Expert commentary: Wiktor Schmidt ........................... 33 What brings money: software consulting, or building a product? .............................................................. 34 Expert commentary: Alina Prawdzik ............................. 35 It’s the recurring revenue, stupid! How startups make money .................................................. 36 Who pays the bills? Customer groups worth chasing ................................................................................ 37 Expert commentary: Bartosz Sokoliński .................... 38 GROWTH & DEVELOPMENT ......................................... 39 What barriers hinder growth? ............................................ 62 Startup regions of Poland: how fast What is most challenging? ................................................... 63 are the startups growing? ..................................................... 40 What do startups expect from Expert commentary: Mateusz Cybula ........................... 41 the government? ......................................................................... 64 At what age tech companies reach Expert commentary: Marta Pawlak, the product-market fit? .......................................................... 42 A closer look at legal barriers .............................................. 65 How fast do startups grow their revenue? ................. 43 STARTUP FINANCING ...................................................... 67 What revenue levels make startups extremely happy? ........................................................................ 44 Startup regions of Poland: perception of change in capital availability ......................................... 68 Overall startup development: not bad, but could be better? .................................................................. 45 Expert commentary: Michał Pukacz, Maciej Jankowski .......................................................................................... 69 Expert commentary: Marcin Kurek ................................ 46 Expert commentary: Michał Karwacki, Natalia Expert commentary: Joanna Parasiewicz, Burchardt, Kamil Ciodyk, Małgorzata Deruś, How did David defeat Goliath and why Negotiating investment agreements. What a do startups need a cloud? .................................................... 47 startup needs to know to impress the investor? ... 70 What are the founders’ best case scenarios? ........... 48 How bootstrapping has changed What activities have the highest impact over the years? ............................................................................... 72 on startup development? ...................................................... 49 Trends in sources of startup funding ............................. 73 Partner’s material: Małgorzata Oleszczuk, PARP, Expert commentary: Bartłomiej Owczarek, Open innovation works for startups .............................. 50 Steady improvement, but “smart money” Expert commentary: Dariusz Żuk, is often still “little money” ....................................................... 74 Attention, dear founders! ....................................................... 52 Rounds of funding ...................................................................... 75 What makes a great mentor ................................................ 53 Expert commentary: Wojciech Fedorowicz, Expert commentary: Marek Kapturkiewicz ............. 54 The Polish ecosystem is growing ...................................... 76 How public tenders drive the growth Total equity funding volume ................................................ 77 of startups ......................................................................................... 55 How meeting VCs converts to term sheets ............... 78 Why don’t startups take part Expert commentary: Marcin Szeląg, in public tenders? ........................................................................ 56 The warmup decade has passed. Expert commentary: Justyna Orłowska ...................... 57 What should happen next? ................................................. 79 How corporations drive the growth of startups ..... 58 Public grant applications ....................................................... 80 Expert commentary: Bartosz Józefowski, Volume of funding from public grants .......................... 81 The middle-income trap – startup edition ................ 59 Equity ownership among the founders ....................... 82 How startups cooperate with corporations ............... 60 Startup exits ................................................................................... 83 Partner’s material: Patrycja Panasiuk, Expert commentary: Tomasz Swieboda ..................... 84 PKN ORLEN ...................................................................................... 61 Table of contents INTERNATIONAL EXPANSION ...................................... 85 INNOVATION AND R&D .................................................. 101 Export-oriented startup regions of Poland ................ 86 Deeptech-friendly regions of Poland .......................... 102 Expert commentary: Izabela Disterheft ...................... 87 Expert commentary: Daniel Dereniowski ............... 103 How efficient Polish startups are in winning How tech startups cooperate on R&D international customers .......................................................... 88 with the scientific community ......................................... 104 How startups plan international expansion .............. 89 Expert commentary: Tomasz Trzciński, Expert commentary: Miron Mironiuk ........................... 90 R&D as a counter poison ...................................................... 105 What share of the revenue typically Which academic institutions in Poland comes from export ...................................................................... 91 support startups in R&D ....................................................... 107 Expert commentary: Michał Kramarz, Expert commentary: Paweł Tadejko, Google for Startups .................................................................... 92 Where did the Polish innovations go? ........................ 108 Expert commentary: Jacek Figuła .................................. 94 How much startup equity belongs to universities and research institutions ........................... 110 Where Polish startups have foreign subsidiaries .................................................................... 95 Expert commentary: Marcin Koprowski ...................... 111 Partner’s material: Piotr Grabowski, Hubhub ......... 96 How tech firms in Poland protect their IP ................. 112 Why startups don’t have any Expert commentary: Miron Tokarski, foreign customers ....................................................................... 97 The journey of patenting ........................................................ 113 Partner’s material: Sebastian Perczak, Expert commentary: Paweł